TEXT
FOR DELIVERY: 9:30 A.M., E.D.T.
FRIDAY, JUNE 3, 1994
___________________________________________________________
Advance copies of this statement are made available to the
press under lock-up conditions with the explicit
understanding that the data are embargoed until 8:30 a.m.
Eastern time. ____________________________________________
Statement of
Katharine G. Abraham
Commissioner
Bureau of Labor Statistics
on
June 3, 1994
Thank you for joining us here this morning. I would
like to offer a few comments to supplement today's
Employment Situation news release, and my colleagues and I
would then be happy to answer any questions that you may
have.
As was reported earlier this morning, the nation's
unemployment rate fell in May and the number of payroll jobs
continued to rise, but at a more modest pace than in the
prior 2 months. The measure of total employment from the
household survey registered a large gain in May; this brings
its year-to-date increase more in line with that exhibited
by the payroll survey. As an aside, I would note that
payroll employment estimates have been revised to reflect
the benchmarking to the March 1993 universe count and
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updated seasonal factors. I will discuss these revisions in
a few moments.
Since December, the number of payroll jobs has
increased by 1.2 million, an average of 247,000 a month.
Since January, the first month in which household estimates
were obtained from the revised Current Population Survey,
total employment has risen by about 900,000, an average of
225,000 a month. More than half a million of this gain was
recorded in May. Results from both surveys show the pace of
job growth thus far in 1994 to be somewhat above the average
for 1993.
The over-the-month fall in the jobless rate, from 6.4
to 6.0 percent, brings the total decline since January to
seven-tenths of a percentage point. The rates for adult men
and adult women have declined by roughly equal amounts since
the start of the year; the rate for teenagers has shown no
clear trend. Whites, blacks, and Hispanics all have shared
in the unemployment rate reduction. The number of
unemployed persons, 7.9 million in May, has fallen by about
800,000 since January. In examining these figures, data
users should remember that, whenever unusually large
movements occur in a single month, the magnitude of those
changes often turns out to have been overstated once
additional data become available. It nonetheless is clear
that unemployment continues to trend downwards.
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Each month since January, the Bureau has prepared a
projection of what the unemployment rate would have been had
we continued to conduct our household survey using pre-1994
methods. The graph attached to my statement plots our best
estimates of unemployment as it was or would have been
measured, using both the old and the new survey methods, for
the period January 1993 to May 1994. This graph should,
however, be interpreted cautiously since the projections for
the later months of 1994 are inherently less reliable than
those for the earlier months.
Beginning next month, we had planned to replace these
unemployment projections with data derived from a special
small-scale parallel survey. This parallel survey using the
old pencil-and-paper collection methods was initiated at a
time when there were serious questions about how the
redesigned household survey would perform in its early
months. Data from the redesigned survey have, in fact,
behaved quite reasonably and seem to have been well
accepted. Given the competing pressures on the Bureau's
budget, together with serious technical concerns about the
quality of the data from the new parallel survey, we have
decided to discontinue its collection.
Returning to the results of our employer survey, the
increase of 191,000 jobs reported for May followed much
larger gains in March and April. The May rise included a
return of about 70,000 strikers in the trucking industry;
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absent their return, the May gain would have been about
120,000 jobs.
Services accounted for most of the over-the-month job
rise, net of the gains associated with the return of
striking workers. But in this industry, as in many others,
the pace of growth was much slower than in the prior 2
months. Business services, in particular, registered an
unusually small increase.
The expansion in construction employment also slowed in
May. Factory employment was flat, with no noteworthy
changes among the individual manufacturing industries. Both
the manufacturing workweek and factory overtime hours eased
back a tenth of an hour from extremely high April levels.
Finance, insurance, and real estate experienced an
employment decline, reflecting in part the impact of rising
interest rates on refinancing and home purchases.
Employment gains in retail trade were somewhat more modest
than in recent months, but, generally speaking, retail
employment growth has been quite strong since late last
year.
Today, we are issuing revisions to the payroll
employment series to incorporate our routine annual
benchmark adjustments. Each year at this time, we re-
calibrate our sample-based survey estimates to full universe
counts, derived principally from a separate BLS program that
aggregates administrative records from the state
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unemployment insurance tax system. The benchmark adjustment
to the seasonally adjusted March 1993 level is an upward
revision of 239,000 jobs, or two-tenths of one percent.
Estimates for the post-benchmark period, April 1993
forward, also have been recalculated, in accordance with
standard practice, to incorporate the shift to a new
benchmark level as well as recomputed bias adjustment and
seasonal adjustment factors. The benchmark process resulted
in an average upward adjustment of about 25,000 jobs per
month for the period since April 1992, indicating somewhat
stronger job growth than originally reported. The revisions
to the employment estimates for the benchmark and post-
benchmark time periods are well within historical ranges.
In summary, the job market continued to improve in May.
The unemployment rate declined and total employment from the
household survey registered a substantial increase, bringing
job growth in this survey about in line with that from the
payroll survey for the year thus far. Payroll job growth
was more modest than it had been in March and April, but
this must be viewed in the context of the past 2 months'
growth having been exceptionally strong.
My colleagues and I now would be glad to answer any
questions you might have.